§135. Deposit of state funds; limitations

The Treasurer of State may deposit the money, including trust funds of the State,
in any national bank or in any banking institution, trust company, state or federal
savings and loan association or mutual savings bank organized under the laws of this
State or having a location in the State except as provided in chapter 161. Before
making a deposit, the Treasurer of State must consider the rating of the banking institution,
trust company, state or federal savings and loan association or mutual savings bank
on its most recent assessment conducted pursuant to the federal Community Reinvestment
Act, 12 United States Code, Section 2901. The Treasurer of State may transfer funds
into and out of the respective funds in the cash pool as circumstances may require
to meet current obligations and shall request the State Controller to effect such
transfers by journal entry as set forth in section 131-B. When there is excess money
in the State Treasury that is not needed to meet current obligations, the Treasurer
of State may invest, with the concurrence of the State Controller or the Commissioner
of Administrative and Financial Services and with the consent of the Governor, those
amounts in bonds, notes, certificates of indebtedness or other obligations of the
United States and its agencies and instrumentalities that mature not more than 36
months from the date of investment or in repurchase agreements that mature within
the succeeding 12 months that are secured by obligations of the United States and
its agencies and instrumentalities, prime commercial paper, tax-exempt obligations
and corporate bonds rated "AAA" that mature not more than 36 months from the date
of investment, banker's acceptances or so-called "no-load" shares of any investment
company registered under the federal Investment Company Act of 1940, as amended, that
complies with Rule 2a-7 guidelines and maintains a constant share price. The Treasurer
of State may participate in the securities loan market by loaning state-owned bonds,
notes or certificates of indebtedness of the Federal Government, only if loans are
fully collateralized by treasury bills or cash. The Treasurer of State shall seek
competitive bids for investments except when, after a reasonable investigation, it
appears that an investment of the desired maturity is procurable by the State from
only one source. Interest earned on those investments of money must be credited to
the respective funds, except that interest earned on investments of special revenue
funds must be credited to the General Fund of the State. Effective July 1, 1995,
interest earned on investments of the Highway Fund must be credited to the Highway
Fund. Interest earned on funds of the Department of Inland Fisheries and Wildlife
must be credited to the General Fund. Interest earned on funds of the Baxter State
Park Authority must be credited to the Baxter State Park Fund. This section does
not prevent the deposit for safekeeping or custodial care of the securities of the
several funds of the State in banks or safe deposit companies in this State or any
other state, nor the deposit of state funds required by the terms of custodial contracts
or agreements negotiated in accordance with the laws of this State. All custodial
contracts and agreements are subject to the approval of the Governor. [2005, c. 386, Pt. CC, §2 (AMD).]

The Treasurer of State may accept component unit and nonstate funds into custody and
invest those funds along with excess state funds as prescribed in this section. [2003, c. 20, Pt. T, §3 (NEW).]

For the purpose of this section only, tax-exempt obligations and securities are limited
exclusively to tax-exempt commercial paper and tax-exempt bonds maturing in less than
2 years. [1985, c. 757, (NEW).]

No sum exceeding an amount equal to 25% of the capital, surplus and undivided profits
of any trust company or national bank or a sum exceeding an amount equal to 25% of
the reserve fund and undivided profit account of a mutual savings bank or state or
federal savings and loan associations may be on deposit therein at any one time.
The restriction does not apply to deposits subject to immediate withdrawal available
to meet the payment of any bonded debts or interest or to pay current bills or expenses
of the State. The restriction does not apply to deposits that are secured by the
pledge of certain securities as collateral, nor to deposits fully covered by insurance.
Such collateral must be in an amount equal to such deposit. The Treasurer of State
may require, in the discretion of the Treasurer of State, collateralization or insurance
for the full amount of any deposit of public funds, whether held by an institution
permitted under this section or by a vendor contracted to collect or disburse public
funds. The value of the securities so pledged must be determined by the Treasurer
of State on the basis of market value. The Treasurer of State shall review the value
of securities pledged on January 2nd and July 2nd of each year. The collateral must
consist of securities or obligations issued or fully insured or guaranteed by the
United States, an agency or instrumentality thereof or a United States government
sponsored corporation. The securities must be held in a depository institution approved
by the Treasurer of State and pledged to indemnify the State of Maine against any
loss. Notice of such hypothecation at the time of deposit must be given to the Treasurer
of State by the depository institution and a copy of said notice mailed to the Office
of the State Auditor. [2003, c. 20, Pt. T, §3 (AMD); 2013, c. 16, §10 (REV).]

It is the intent of the Legislature that the Treasurer of State shall seek competitive
bids whenever possible prior to the selection of investments under this section. [1977, c. 197, §2 (NEW).]

The Treasurer of State may deposit an amount not to exceed $4,000,000 in each calendar
year with responsible financial institutions authorized to do business in the State
at a rate of return not more than 2% per year below the rate of return otherwise obtainable
had the funds been invested with such financial institutions for a similar term, as
determined by the treasurer, for periods not to exceed one year, provided that each
such financial institution covenants with the treasurer as a condition of the deposit
to loan an amount at least equal to the amount so deposited with the financial institution
by the treasurer under this paragraph to agricultural enterprises located within the
State for agricultural purposes. All the loans must be at interest rates that are
below the interest rates the loans would have borne under existing market conditions
and loan standards of the financial institution but for the deposit by the treasurer
under this paragraph, and the interest rates must fully reflect the savings to the
financial institution due to the reduced interest rate paid on the deposit. Notwithstanding
any provisions of this section to the contrary, the treasurer is not obligated to
seek competitive bids for investments or deposits pursuant to this paragraph. The
Finance Authority of Maine shall provide assistance to the treasurer in implementing
this paragraph. For purposes of this section, "agricultural enterprises" means
a business involving cultivating soil, producing crops and raising livestock or their
by-products. In adopting rules to implement this paragraph, the treasurer shall consider
criteria targeting loans under the program to geographic areas of financial need and
borrowers who are new entrants to agriculture, and may establish limits on deposits
to any one financial institution and limits on deposits supporting loans to any one
borrower. [2003, c. 20, Pt. T, §3 (AMD).]

The Treasurer of State may deposit an amount not to exceed $4,000,000 in each calendar
year with responsible financial institutions authorized to do business in the State
at a rate of return not more than 2% per year below the rate of return otherwise obtainable
had the funds been invested with such financial institutions for a similar term, as
determined by the treasurer, for periods not to exceed one year, provided that each
such financial institution covenants with the treasurer as a condition of the deposit
to loan an amount at least equal to the amount so deposited with the financial institution
by the treasurer under this paragraph to commercial enterprises approved by the treasurer
pursuant to this paragraph. All the loans must be at interest rates that are below
the interest rates the loans would have borne under existing market conditions and
loan standards of the financial institution but for the deposit by the treasurer under
this paragraph, and the interest rates must fully reflect the savings to the financial
institution due to the reduced interest rate paid on the deposit. Notwithstanding
any provisions of this section to the contrary, the treasurer is not obligated to
seek competitive bids for investments or deposits pursuant to this paragraph. The
Finance Authority of Maine shall provide assistance to the treasurer in implementing
this paragraph. For purposes of this paragraph, eligible commercial enterprises are
for-profit businesses with 20 or fewer employees or annual sales of less than $2,500,000,
whose sales of services or products are primarily out of state or that are manufacturers,
that are primarily owned and operated by Maine residents or by corporations that are
primarily owned and operated by Maine residents, when the treasurer determines that
not less than one job will be created or retained per $20,000 of deposited funds.
The maximum loan to any borrower for which a deposit may be applied under this paragraph
is $200,000, and businesses are eligible to receive subsidies pursuant to this paragraph
for a maximum of an aggregate of 24 months. In adopting rules to implement this paragraph,
the treasurer shall consider criteria targeting loans under the program to geographic
areas of financial need, and may establish limits on deposits to any one financial
institution, further limits on deposits supporting loans to any one borrower, and
further restrictions on eligibility. [2003, c. 20, Pt. T, §3 (AMD).]